Spotify is letting go 17% of its global workforce for economic retrenchment.
As reported by Variety, the CEO of Spotify, Daniel Ek said on Monday, that they would lay off hired people from the company to cut the costs.
“I recognize this will impact a number of individuals who have made valuable contributions. To be blunt, many smart, talented and hard-working people will be departing us,” Ek said in an internal memo he has sent to the staff.
Spotify has struggled to become profitable since 2021. Even though the popular music streaming platform was able to gain a steady subscriber growth with 220 million paying listeners the platform is at a -5.7% profit margin.
They have over 9,000 people employed globally which means that around 1500 people are on the verge of losing their jobs.
The CFO of Spotify, Paul Vogel hinted at even more layoffs to occur in July during an earning call.
“Q2 was last quarter where we had headcount higher year over year, and we expect our year over year headcount to be down in Q3 — we’ll see where that goes going forward,” he revealed in a statement.
With a hopeful stance, he further added, “We’re continuing to be more efficient and feel really good about where we are, so you will see some of that efficiency have even more of an impact in the back half of the year with respect to the op-ex.”
Ek has concluded that the company has “moved too far away from this core principle of resourcefulness” as Spotify laid off 6% of its workforce earlier this year and an additional 200 employees last June.
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